Consumer Scams: The Basics

If It Sounds Too Good to Be True ... It Is There are many people trying to scam you for your money, both on and off the Internet. Here are a few of the more common scams, what's at risk, and how to avoid them.

Nigerian or 419 scam

How it Works: This is an investment scam, where someone posing as foreign royalty or a rich heir needs money to get access to their fortune, a portion of which they will pass along to you if you help. Many variations of this story have existed over the years, but one underlying factor remains the same: the scammer needs your money.
The Risk: This scam is targeted at getting as much money from you as possible, as more money is often requested for various escalating excuses.
The Solution: To avoid this, do not send money to anyone you do not know or have never met, no matter how convincing the story is. Years of scamming experience allow these fraudsters to pick and use targets very effectively.

Help Desk

How it Works: The help desk scam is when a request is made for your personal login information, typically at work or even at some Universities lately. These come in the form of emails or phone calls from someone supposedly in your organization who needs to verify your information for a critical reason.
The Risk: Your login information can give hackers and social engineers access to personal data and sensitive company data that can be used for countless more scams.
The Solution: It is important to know that no organization will ever have personnel make such queries under any circumstances. Your IT department and management do not need to ask you for this information - they already have it.


How it Works: Phishing attacks typically occur in email appearing to be from your bank or online payment company, requesting that you login for various reasons. Clicking the link in the email sends you to a website very similar to the real bank's website, but it is fake. Phone phishing - or vishing -- is another issue, where a phony bank representative is trying to confirm your online login or other personal information. They may be very convincing by confirming your name and address and maybe even your account number, but there is still some thing they need.
The Risk: Someone who has your login information for your bank account can get access to all of your savings. Other important logins may give access to private information like social security numbers.
The Solution: Banks and other companies never request your login information. Do not click on any links in the email or answer any security-specific phone questions. If there is a serious concern, you can open a browser and manually type in your bank's web address to avoid phishing. Any major alerts should be listed, or you can contact them regarding the email or phone call.

Pyramid, Work From Home, and Get Rich Quick

How it Works: These are performance-based scams, where buying into a sales pitch to receive training can earn millions of dollars. They may even guarantee a small payment, but the only way to make the large amounts of money is to get hundreds of people to sign up, who then also need to get hundreds more.
The Risk: People victim to this scam usually pay an upfront fee to gain access to the sales materials or the 'fool-proof' money maker. A lot of time is also invested in the sales pitch before the scam is realized.
The Solution: Any 'easy money' job is too good to be true. Make sure the payroll schedule for any new job is consistent and is not dependant on any factors besides your hours worked.

Second-Chance Auctions

How it Works: Scammers often look for closed online auctions and then send phony emails to second-place bidders, offering them another chance to purchase the product. Unfortunately, the scammer does not have the product, and you lose your money.
The Risk: Auctions can reach very high prices, and losses of thousands of dollars due to this scam are not uncommon.
The Solutions: Consumers should never reply directly to emails from sellers. Logging into your account (not through an email link), will provide any information on auctions and allow you to pay through the auction site. Do not send money directly to anyone, no matter how convincing the story.

About the Author

Thomas Donchez

Thomas Donchez

Contributing Writer

Thomas Donchez is a graduate of East Stroudsburg University of Pennsylvania, where he earned a Bachelor of Science Degree in Computer Security and Computer Science. Tom is currently working toward his Masters Degree in Computer Science and resides near Allentown, PA.

With a strong background in computer security and great interest in current trends, Tom enjoys writing on security related topics. His recent research includes rootkit detection and advanced steganography methods, and his thesis work relates to network traffic analysis and reporting. Tom also spent three years as an ASP.NET web developer.

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